FDA advisory panel has backed and given a green signal to Auxilium Pharmaceutical’s experimental Xiaflex therapy which cures Dupuytren’s contracture. The FDA panel has stated that the Xiaflex therapy is absolutely effective and safe and a better alternative to surgery as a treatment for a condition that affects the connective tissues in the hand. With this approval by FDA, Auxilium’s share prices have been stable for sometime as investors are waiting for what’s the next step, to make sure they have invested in the right place at the right time. This is not only a good news for Auxilium Pharmaceuticals but also ...

Trading FDA Decisions with Calendar Spreads

Joe Kunkle, The Investment U Research Team

FDA approvals/rejections of drugs can make or break a Biotech company. These decisions can be incredibly volatile and profitable if you’re positioned correctly.

There have been instances where shares lose more than three-fourths of its value and other cases where a company rises 900% or more in a single day (like Vanda Pharmaceuticals recently).

In most instances, it’s pretty clear when the FDA will make a decision on a key drug, often named the PDUFA data.

Also, companies generally make available dates that it will present top line data from drugs, before it submits it to the FDA for approval of an NDA (New Drug Application).

The information on FDA decisions and announcement dates are out there. And many talented investors make a lot of money playing them.

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Below are four companies with market caps under $200 million (all financial data current as of 6/9/09 during intraday trading) which have pending FDA decisions and/or clinical trial results that may have a major impact on each of the underlying stock prices. A high risk/reward trading approach to consider for speculative traders is investing a small amount of money that you can afford to lose in a basket of stocks included in Extreme FDA and Clinical Trial Calendar Trades, which are highlighted in periodic articles at BioMedReports.com. Another approach is to simply buy such companies well ahead of their expected catalyst dates for a possible stock price increase as the date approaches and trading activity increases.

1.) Angiotech Pharma [ANPI: 1.97, 0.00 (0.00%)] – currently trading at $2.14, market cap = $182 million

ANPI has an FDA-approved dialysis catheter (HemoStream) that is sold through its direct sales

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